Mining Stocks Break Out as Dollar Weakness Fuels Commodities Surge
The recent breakout in mining stocks is driven by rising commodities prices, which are themselves fueled by weakness in the U.S. dollar.
As the dollar index falls below its 200-day moving average and reaches its lowest level since May, precious metals like gold and copper gain value due to inflationary effects.
Gold has reached a new high since May, trading above its 200-day moving average for the first time since June, mirroring the dollar's downtrend.
Copper prices are also breaking out, forming an ascending triangle pattern that suggests further increases in commodities prices.
The article then grades three top mining stocks: Freeport-McMoRan (FCX), BHP Group Ltd. (BHP), and Newmont Corp (NEM).
Freeport-McMoRan has been forming a base since the start of the year, finally breaking out last week and appearing headed for the $90 to $95 area.
BHP Group has also broken out of its base, starting in April, and appears headed for the $115 area.
Newmont Corp is trading near all-time highs but still needs to break out of its current consolidation before reaching the $160 area.